Self Directed Health Plan (SDHP)
There is an increasing awareness that preventive care can help keep us healthy and help avoid high medical costs. Such care includes routine physical exams, well baby care, well woman care, diagnostic tests, and immunizations. The cost of covering preventive services under a traditional individual health insurance plan, however, is higher than many can afford.
This is the situation that Self Directed Health Plans (SDHP) were invented to address. These plans have a high deductible, which keeps the monthly premiums low. Their special feature is that they offer “up-front” cash to pay for certain preventive health care before a deductible or coinsurance is required.
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Self Directed Health Plan (SDHP) Benefits
- Lower premium than traditional health insurance plans.
- Up-front cash each calendar year quarter, to be used for certain preventive care.
- Any unused cash usually rolls over to cover future expenses.
- You have as much freedom to choose doctors as under a PPO plan and more freedom than in an HMO. (You can choose any doctor you like but you receive the most coverage if you use an in-network doctor.)
Limitations of Self Directed Health Plans (SDHPs)
- A high deductible means you are responsible for a certain dollar amount of medical care (other than the up-front cash) before coverage begins.
- Freedom to chose your own health care providers (doctors, etc.) is more limited than under a traditional plan.
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Self Directed Health Plan (SDHP) Product Features
Many of us don’t go to the doctor often. We stay healthy through a healthy lifestyle and by getting regular check-ups and routine screenings. If this describes you, a SDHP plan may suit your needs.
Because it has a high deductible, the plan keeps your premium low, so you’re not paying for medical care you don’t use.
Each quarter, the plan provides a set dollar amount ($250, for example) in a Self Directed Account (SDA). This money is yours to use for specified preventive care. On these service, there is no deductible and no coinsurance.
For most SDHP plans, if you don’t use all of the money in your SDA in a given quarter, the money rolls over for future use. At the end of a year at the $250 amount, for example, you will have built a savings of $1000 to use for preventive care.
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